02387cam a22002657 4500001000700000003000500007005001700012008004100029100002500070245011100095260006600206490004200272500001800314520121600332530006101548538007201609538003601681690005601717690013401773700002001907710004201927830007701969856003802046856003702084w17495NBER20150331172201.0150331s2011 mau||||fs|||| 000 0 eng d1 aLucas, Robert E, Jr.10aKnowledge Growth and the Allocation of Timeh[electronic resource] /cRobert E. Lucas, Jr., Benjamin Moll. aCambridge, Mass.bNational Bureau of Economic Researchc2011.1 aNBER working paper seriesvno. w17495 aOctober 2011.3 aWe analyze a model economy with many agents, each with a different productivity level. Agents divide their time between two activities: producing goods with the production-related knowledge they already have, and interacting with others in search of new, productivity-increasing ideas. These choices jointly determine the economy's current production level and its rate of learning and real growth. Individuals' time allocation decisions depend on the knowledge distribution because the productivity levels of others determine their own chances of improving their productivities through search. The time allocations of everyone in the economy in turn determine the evolution of its knowledge distribution. We construct the balanced growth path for this economy, thereby obtaining a theory of endogenous growth that captures in a tractable way the social nature of knowledge creation. We also study the allocation chosen by an idealized planner who takes into account and internalizes the external benefits of search, and tax structures that implement an optimal solution. Finally, we provide two examples of alternative learning technologies, as concrete illustrations of other directions that might be pursued. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aO0 - General2Journal of Economic Literature class. 7aO15 - Human Resources • Human Development • Income Distribution • Migration2Journal of Economic Literature class.1 aMoll, Benjamin.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w17495.4 uhttp://www.nber.org/papers/w1749541uhttp://dx.doi.org/10.3386/w17495